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How to get the maximum from your investment firm
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Loading...1. Really angry with your bank or credit-card company? Threaten to close your account.
Call centers work on the basis of "delegated authority." For example, a frontline agent may be able to waive one late fee for an excellent customer. A manager could waive a bit more. The most authority usually often sits with the retention team.
Be firm in your desire to close, because you can often end up with an even better deal.
2. Don't scream at the customer service representative.
Being a customer service representative is not an easy job. The workers are not paid high salaries and are often located offshore. They are almost always not to blame for your problem. Yet they get blamed — and screamed at — all day.
3. Be honest with yourself and focus on long-term value.
Whenever I do the math on a financial product, I choose a product based upon long-term value rather than short-term bonus offers. Sign-on bonuses are nice, but they are not the main reason I take out a product.
4. Avoid add-on insurance products.
Finance companies continue to make a lot of money selling insurance products with loans and credit cards. I have seen lending businesses generate 30% or more of their profit by selling credit insurance that covers you in case of death, unemployment, or disability.
The sales pitch usually sounds like this: "For less than the cost of a soda a day, you can provide your family with peace of mind."
Almost always, these products offer horrible value. Look for a good-term life insurance and long-term disability policy that covers all of your needs.
5. Everyone spends more money on plastic, including you.
Study after study shows that people spend more money when they use plastic, including debit cards. When you carry around a finite pile of cash, you tend to spend less money.
6. The best offers are for new customers.
Banking is a constant battle for customers. If you are looking for the best deals, you will have to switch to a new product.
7. Beware of direct mail.
To win in direct mail, banks don't need to have the best product in the market. Instead, banks just need to have the best product in your mailbox on that day.
Whenever you receive an offer in the mail, go online and shop around to ensure you have really been offered the best deal.
8. Just because the bank says you can have it doesn't mean you can afford it.
When banks calculate affordability, they have a simple metric. They want to make sure you can afford to make the monthly payment. Banks do not think about retirement planning, college funds, or other financial needs.
You may be shocked when you see how much mortgage you can get, or how big your credit card limit is. That doesn't mean you can afford to use it all, though.
9. If you don't understand it, don't buy it.
You should never be afraid to ask questions that you think are stupid, and you should avoid anything you don't understand. Complexity is the enemy of transparency and is usually the enemy of the consumer.
10. Understand how the money is made before buying anything.
Arguably, this should be No. 1. Whenever I am being sold a banking product, I think about how the money is being made. Then I pay close attention to whenever I am being asked to do something that will generate earnings for the bank.
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